After facing dramatic rent hikes, South Floridians must now work many more days full time to be able to afford the typical rent in the area, according to a new analysis.
At the average wage, workers in South Florida now would need to work a total of 96 hours — instead of 72 hours five years ago — the equivalent of working three more full-time days, Zillow found.
“Renters in Miami face the greatest affordability hurdles,” the report said. “That is over 24 hours more than Miami renters would have needed to work to pay rent five years ago, the biggest gap of the 50 largest U.S. metro areas.”
The typical rent in South Florida is about 16% higher, or $2,827, than it was a year ago. Five years ago, in 2017, a worker would have needed to work about 72 hours to afford the typical rent, which was $1,773.
On a national level, a renter making the average wage needs to work about 63 hours to afford the typical U.S. level rent of about $2,040, about a full time day more than they needed to five years ago.
Other areas in Florida also have seen large increases: To afford the typical rent in Orlando, a renter would need to work 67 hours, up 11 hours from five years ago. In Tampa, it would take 69 work hours, up 20 hours from five years ago.
Most of the more affordable rents are in the Midwest: In St. Louis, a resident who makes the average wage needs to work 37 hours to pay the typical rent of $1,272, the same amount it took five years ago.
In Milwaukee, it takes 37 hours of work to afford the rent, up one hour from five years ago. In Buffalo, it takes about 41 hours, up three hours from five years ago.
How much have rents started to slow?
Signs have indicated that while rents in South Florida are still significantly higher than they were a year ago, the rate of growth could be slowing.
According to data from RedFin, asking rents, or the rents offered when signing a new lease, have started to moderate. In Miami, asking rents grew about 8.5% in October compared to the year before. In September, they grew about 7.3% compared to the year before, a slight decrease from when asking rents had increased about 10% in August when compared to the year before.
“Rent growth has just barely started to cool in South Florida. Rents have grown 59% over the past five years and the average wage is up only 19%,” said Jeff Zucker, an economist with Zillow.
Despite the rental market cooling, renters aren’t necessarily seeing it translate to them as rents haven’t fallen enough to put a dent on the affordability crisis. Many are still struggling with increased costs and rent hikes, as wages have not kept pace with housing costs.
“It’s gotten worse,” said Olivia Charlton, housing navigator with H.O.M.E.S. Inc., a nonprofit that helps find affordable housing for low-income residents.“You have a lot of families doing shared housing with roommates just to actually meet the responsibility on a monthly basis. It’s really hard for a person to actually be able to pay bills with the current wages.”
And renters are paying a premium on rents.
The Waller Weeks and Johnson Rental Index, which measures how much renters are paying versus where rents should be based on long term trends, shows that in October, the typical rent was about $400 more than where it should be.
Currently the average rent is $2,827, and long-term trends suggest it should be about $2,421.
“The slowing in rental costs just hasn’t trickled down to us,” said Linda Taylor, CEO of H.O.M.E.S. “On a personal level for my friends who have children who just got out of college, some of them are moving home because even the starting wages for a graduate aren’t enough.”
South Florida renters are dealing with what will most likely be a prolonged period of unaffordability. Last year, Zillow found that South Florida was on its way to becoming the most unaffordable place for people to rent relative to their income, with renters paying at least 40% of their income toward rent.
“There’s not much sign of rent levels actually dropping substantially back down,” Zucker said. “Renters’ budgets are likely to remain squeezed for the foreseeable future.”
